(Bloomberg Opinion) -- The U.S. commercial real estate sector could be the next shoe to drop for the Federal Reserve; it may need some emergency triage. There were $3.66 trillion of commercial mortgage-backed securities outstanding at the end of 2019, more than one-fifth of the overall U.S. mortgage securities market. And the signs of distress are appearing.Real estate investor Tom Barrack has issued dire warnings of a “domino effect” of margin calls, cross defaults and other related debt failures if financing in the sector dries up. To prove his fears might be well placed, Invesco Mortgage Capital Inc., a real estate investment trust, said on Tuesday that it can’t make its margin calls (demands for extra capital or securities that kick in when asset prices fall). It won’t be alone.The coronavirus-inflicted crisis of confidence is also afflicting the primary market for commercial property debt as deals slated for sale aren’t being completed. A syndicate of banks led by Citigroup Inc. — and including Deutsche Bank AG, Barclays Plc and Societe Generale — has been left holding billions of dollars of debt on a Las Vegas casino deal, involving currently shuttered MGM Grand and Mandalay Bay properties, according to Bloomberg News.This won’t be the last project that debt investors back away from, leaving the underwriting banks exposed. And unfortunately, this isn’t just about large, well-capitalized banks being overgenerous in financing risky projects. This could become a systemic problem if risk appetite is pared to the bone. If things keep heading in this direction, the world’s other central banks will be looking to take their lead from how the Fed’s prepared to respond. The commercial property market is under severe strain internationally because of the Covid-19 enforced shutdowns of retail and leisure businesses.That said, the commercial mortgage-backed security market is considerably larger in the U.S. than elsewhere, and has a much wider variety of credit quality. In Europe, there are measures in place to manage the fallout from similar asset-backed securities, although commercial mortgage-backed stuff is rarer there. The European Central Bank doesn’t buy the latter, but it has already purchased more than 30 billion euros ($33 billion) of investment grade asset-backed securities in an ongoing program.A crisis in commercial property could force the Fed and other central banks to ease up on a lot of accounting regulations, maybe by not making lenders mark assets to market prices and allowing more forbearance on loans. It might even require the Fed and the U.S. Treasury to build further on its bailout template from the last financial crisis and restart the Troubled Asset Relief Program (TARP) to buy toxic assets directly. It used the Public-Private Investment Program (P-PIP), unveiled back in March 2009, to buy legacy loans and securities.This time around, the U.S. has already restarted the Term Asset-Backed Securities Loan Facility (TALF), but that doesn’t include non-public distressed real-estate assets and commercial property derivatives. The Fed has fired several bazookas in response to the virus crisis, including unlimited Quantitative Easing for Treasury bonds and residential mortgage-backed debt. It’s even buying investment-grade corporate bonds, to the despair of some. But it won’t end there. The wider risk now is how commercial real estate copes if the banking system gums up its access to financing.This column does not necessarily reflect the opinion of Bloomberg LP and its owners.Marcus Ashworth is a Bloomberg Opinion columnist covering European markets. He spent three decades in the banking industry, most recently as chief markets strategist at Haitong Securities in London.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

While real estate is typically considered a defensive sector, real estate investment trust (REIT) values have been slammed by the lockdown of the U.S. economy to slow the spread of COVID-19. Overall, the Dow Jones Select REIT Index is down nearly approximately 28% for the year to date, almost double the 17% decline in the broad S&P 500 index. "You're seeing that the market is pricing in something approaching the Great Recession," said Burl East, whose Altegris/AACA Opportunistic Real Estate fund is the top-performing real estate fund this year and over the last three and five years, according to Morningstar data.

We hate to say this but, we told you so. On February 27th we published an article with the title Recession is Imminent: We Need A Travel Ban NOW and predicted a US recession when the S&P 500 Index was trading at the 3150 level. We also told you to short the market and buy […]

Invesco Mortgage Capital Inc. (NYSE: IVR) today announced that its Board of Directors declared quarterly dividends on shares of its common stock and Series A preferred stock.

Invesco Mortgage Capital Inc. (the "Company") (NYSE: IVR) today announced that due to the public health impact of the coronavirus outbreak (COVID-19) and to support the health and well-being of the Company's stockholders, employees, and community, the Company has changed the location of the 2020 Annual Meeting of Stockholders of Invesco Mortgage Capital Inc. The Annual Meeting will be held over the Internet in a virtual meeting format only. You will not be able to attend the Annual Meeting in person. The date and time have not been changed, and the meeting will continue to be held on May 5, 2020 at 2:00 p.m., Eastern Time.

Small cap stocks are listed companies that have market capitalizations typically ranging from $300 million to $2 billion. Since the share prices of these companies can have big fluctuations over a short period of time, companies with market caps of up to $10 billion are also found in the small cap universe.

Shares of Invesco Mortage Capital Inc. are suffering a record selloff to a record low in active trading Tuesday, after the real estate investment trust, which focuses on financing and managing residential and commercial mortgage-backed securities and mortgage loans said it was unable to meet Monday's margin calls. The company said it could not predict whether its lenders would agree to forebear their rights weith respect to an event of default. The stock plunged 49.4% in morning trading, putting it on track to suffer its biggest one-day drop since going public in June 2009, at an IPO price of $20. It had been down as much as 53.1% earlier, at an all-time intraday low of $2.50. Trading volume swelled to 5.3 million shares, already more than the full-day average of about 4.0 million shares. The stock has now plummeted 84.8% over the past month, while the SPDR Real Estate Select Sector ETF has lost 34.8% and the S&P 500 dropped 26.1%.

Invesco Mortgage Capital Inc. (the "Company") (NYSE: IVR) announced today that in recent weeks, due to the turmoil in the financial markets resulting from the global pandemic of the COVID-19 virus, the Company and its subsidiaries have received an unusually high number of margin calls from financing counterparties. Through Friday, March 20, 2020, the Company had timely met all margin calls received. However, on Monday afternoon, March 23, 2020, the Company notified its financing counterparties that it was not in a position to fund the margin calls that it received on March 23, 2020, and that the Company did not expect to be in a position to fund the anticipated volume of future margin calls under its financing arrangements in the near term as a result of market disruptions created by the COVID-19 pandemic.

Q4 2019 Invesco Mortgage Capital Inc Earnings Call

(Bloomberg Opinion) -- The rent is too high. And that’s causing consternation across Wall Street desks still traumatized by the 2008 financial crisis.As the days go by in an unprecedented shutdown of the U.S. economy to slow the coronavirus outbreak, any amount of rent looks increasingly difficult to cover for a wide swath of Americans, from recently fired service workers to local small-business owners. Unfortunately for those most affected, these payments can’t simply be wiped out — at least, not without dire repercussions. My Bloomberg Opinion colleague Noah Smith wrote a column this week arguing that people need a break on all sorts of debts. But when it comes to rent, there’s pretty much no way around people eventually paying what they owe, ideally with the help of the U.S. government, or else risk “turning a health crisis into a banking crisis.”This, more or less, is the catastrophic “domino effect” that real-estate investor Tom Barrack, chief executive officer of Colony Capital Inc., warned about this week. Simply put, if commercial tenants don’t pay rent because of a lack of cash, then property owners might be squeezed and default on their mortgage payments. The same goes for homeowners. That could bring the problem squarely onto the balance sheets of large U.S. banks, which will suffer steep losses on their loans.At first, it might have seemed as if Barrack was simply talking his book. But as more details emerged about the carnage across the $16 trillion U.S. mortgage market, it’s clear that the complex web of financial obligations tied to real estate could again be the flashpoint that leads to a financial crisis without some sort of intervention.Part of the reason that mortgages are again veering into crisis mode is because the modern market has so many moving parts. My Bloomberg Opinion colleague Matt Levine laid it out in a five-part list, which you can (and should) read here. Suffice it to say, if money is being lent twice-over in the repo market, the players are highly leveraged and vulnerable to an unexpected shock. The coronavirus outbreak certainly qualifies as such — some 47,000 U.S. chain stores temporary closed in the span of a week, Bloomberg News reported Tuesday. The median estimate for initial jobless claims on Thursday is 1.5 million, up from 281,000 previously.This mortgage-market meltdown is happening largely because everyone in the money chain is anxious and wants to cash out at the same time. But it also comes back to rent. It’s anyone’s guess when the American economy will be up and running again and what sort of assistance the federal government will provide to those companies forced to close and those individuals suddenly out of a job. It’s hard to blame banks for not wanting to wait around for answers and instead issue margin calls on mortgage real estate investment trusts.Those jitters caused emergency sales from the REITs, including relatively safe (and more liquid) agency debt. But that can’t last forever. On Tuesday, Invesco Mortgage Capital Inc. said it could longer fund margin calls, following in the footsteps of AG Mortgage Investment Trust Inc., which said it failed to meet some margin calls on Friday and doesn’t expect to meet them in the future, and TPG RE Finance Trust Inc., which is seeking flexibility from lenders. They’re almost certainly not the only ones.For now, there’s only so much the Federal Reserve can do to address these strains. It announced open-ended purchases of both U.S. Treasuries and agency mortgage-backed securities on Monday. The central bank is wasting no time flexing its muscle: It’s targeting $250 billion of agency MBS purchases this week after buying $67 billion last week. The previous record was $33 billion in March 2009, according to Morgan Stanley. Many observers are confident that the Fed’s “whatever it takes” model will restore order to the agency MBS market in no time.For non-agency securities, there’s not yet a dedicated lifeline. My Bloomberg Opinion colleague Marcus Ashworth suggests these assets may be the next order of business for the Fed. It’s hard to argue with that, given the central bank’s already unprecedented moves into the corporate and municipal markets.Before the Fed launches yet another emergency facility, though, central bankers should assess the fiscal stimulus package from Congress. If lawmakers provide enough relief for the most affected Americans to get through these next few months and cover their rent, lease and mortgage payments, it might be enough to prevent the first domino from falling in Barrack’s example.The coronavirus outbreak has suddenly halted cash flows of all kinds. Washington needs to keep the spigot open.This column does not necessarily reflect the opinion of Bloomberg LP and its owners.Brian Chappatta is a Bloomberg Opinion columnist covering debt markets. He previously covered bonds for Bloomberg News. He is also a CFA charterholder.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

One esoteric corner of the financial markets is coming under stress again, just as it did after the Financial Crisis, demonstrating just how big the disruption to financial markets has been.

Invesco Mortgage Capital Inc. (NYSE: IVR) today made the following announcements.

Invesco Mortgage Capital Inc. (NYSE: IVR) (the "Company") today announced it will hold its 2020 Annual Meeting of Stockholders on Tuesday, May 5, 2020 at 2:00 pm ET at the Company's headquarters, located at 1555 Peachtree Street NE, 18th Floor, Atlanta, Georgia 30309.

Invesco Mortgage Capital Inc. said Tuesday that it was unable to meet the margin calls it received on March 23, and did not expect to be able to meet the expected volume of future margin calls under its financing arrangements, as a result of COVID-19-related market disruptions. The real estate investment trust, which focuses on financing and managing residential and commercial mortgage-backed securities and mortgage loans, said it was in discussions with its lenders with regard to entering forebearance agreements, in which its lenders would agree to forbear their rights with respect to an event of default. Invesco said it can't predict whether its lenders will enter into a forebearance agreement. In the meantime, the company said it was delaying the payment of its previously announced dividend in order to preserve liquidity, given the impact that fixed income markets have had on its balance sheet and overall liquidity. On March 17, Invesco had said it would pay a quarterly dividend of 50 cents on April 28, to shareholders of record on March 30. Invesco said it has engaged Alston & Bird LLP as legal counsel and FTI LLC as financial advisor. The stock, which rose 6.4% in premarket trading, has tumbled 70.4% over the past month through Monday, while the S&P 500 has lost 30.6%.

The company, which focuses on investing in financing and managing residential and commercial mortgage-backed securities, said it “was not in a position to fund the margin calls it received on March 23, 2020, and that the Company did not expect to be in a position to fund the anticipated volume of future margin calls under its financing arrangements in the near term as a result of market disruptions created by the COVID-19 pandemic.” On Tuesday, Invesco Mortgage Capital’s stock dropped 50% on news it was unable to fund the margin calls received on March 23. The company said it has disputed several of the default claims.

Due to the turmoil in the financial markets resulting from the global pandemic of the COVID-19 virus, the company and its subsidiaries have received an unusually high number of margin calls from financing counterparties.

KlaymanToskes ("KT"), http://www.klaymantoskes.com, announces an investigation on behalf of investors who sustained losses from the purchase of Invesco Mortgage Trust, Inc. (NYSE:IVR) ("IVR") a Real Estate Investment Trust ("REIT"). IVR closed at 18.23 on February 21, 2020, prior to the significant market event that was precipitated by COVID-19. Today, IVR trades at 3.63, or more than 80% lower than its market value on February 21, 2020. This product may have been marketed and sold to investors who were risk averse, such as retirees or other conservative investors, that were seeking income and capital preservation and were not explained the potential risks.

For investors, the challenge is trying to figure out how much value would be left in the worst-case scenario—if the vehicles liquidate.

If you own shares in Invesco Mortgage Capital Inc. (NYSE:IVR) then it's worth thinking about how it contributes to the...

Invesco Mortgage Capital said Tuesday it was unable meet its margin calls it received on Monday and it didn't expect to be able fund the anticipated volume of future margin calls under its financing arrangements due to the disruptions caused by coronavirus pandemic. Shares of the Atlanta-based real estate investment trust were tumbling 47.7% to $2.79. Invesco also said it was also in discussion with lenders regarding forbearance agreements, where the lenders would agree to forbear their rights with respect to an event of default.